Have you ever wondered what happens to all of the damaged dollar bills floating around the economy? How long does paper money actually last before it disintegrates into torn shreds or a pulpy mass that is indistinguishable from regular old paper? And at what point is paper money just too damaged to be used as legal tender?
On March 30 9 p.m. ET/PT, the Discovery Channel will give viewers an inside look at “The Secret Life of Money,” which seeks to answer these questions along with offering many other insights into the world of money, including the history of how gold became a standard form of currency around the world.
David Kestenbaum and Jacob Goldstein from NPR’s "Planet Money" contributed to the special and chatted with Yahoo News about some of the stranger things they’ve learned about cash.
“To me, what’s most interesting is that there is a bigger idea at work here: Money is this thing that we take for granted,” Goldstein said. “When you stop and think about money, it gets really weird, really fast.”
For example, if your money is damaged, you can legally exchange it with the Bureau of Engraving and Printing. But only to a point. The bureau says it receives upwards of 300 envelopes per day, containing “torn, blackened, blood-soaked, shrunken or otherwise maimed money.” However, so long as 51 percent of that blood-soaked bill remains intact, you can get a credit for your damaged bills.
Of course, it's not like you can just walk into the BEP and get crisp, newly printed dollars. There is a process.
"Mutilated currency is processed by the Bureau of Engraving and Printing on a first-come, first-serve basis, and based on the degree of damage," BEP's Lydia Washington told Yahoo News over email. "The BEP processes and redeems genuine damaged U.S. currency as a free public service. Only what can be verified and authenticated is redeemed, not what is claimed; 51 percent of a note must be present or the method/ conditions of destruction must indicate that the missing portions are completely destroyed. Damaged bills are not exchanged for new bills. Once the currency is verified and authenticated, payment for the face value of the total dollar amount is issued in the form of a U.S. Department of the Treasury check."
But back to the durability of the dollar itself.
“It’s not paper the way we normally think of paper. It’s 75 percent cotton and 25 percent linen. It’s like a T-shirt,” Kestenbaum says, explaining why money is actually more physically durable than some might think.
Still, that hasn’t stopped thousands of people each year from testing its limits in strange ways.
For example, one Florida man attempted to dry his money after it became wet by putting it in the microwave. But instead of returning to its crisp, clean form, the money was crisped and burst into flames.
These sort of incidents resulted in the bureau exchanging $28 million worth of paper money in 2011 alone.
Of course, Goldstein and Kestenbaum note that similar incidents are on the decline as money moves toward becoming a predominantly electronic transaction between buyer and seller.
“There is no truck full of dollar bills going from my employer’s bank to my bank,” Goldstein says, noting that the very basic idea of money is really more about trust than physical value. “The U.S. dollar is already basically an electronic currency.”
And with the advent of independent currency providers such as Bitcoin, some people are trying to establish that trust without relying on a government.
Still, Kestenbaum says that for all its shortcomings, paper money is likely to stay with us for years to come. “I am more bearish on the future of physical money,” he said. “At some point, we won’t be using cash at all. Not in the next year, but in 50 years? Probably.”
Ironically, one of the reasons Goldstein and Kestenbaum say the U.S. dollar has a future in its physical form is its popularity outside of America. They note that there are currently more $100 bills outside the U.S. than within the borders of the country that printed them.
If you add up all of the cash, "there’s a lot missing because of how much is used overseas,” Kestenbaum said.